T. Gorton

Mr. GORTON

Mr. GORTON. Is that the Gorton-Rockefeller-Dole amendment to the Coverdell-Dole amendment?

Mr. GORTON. What is the pending business and what is the status of the pending business?

Mr. GORTON

Mr. GORTON. Mr. President, I thank the Chair. (The remarks of Mr. Gorton pertaining to the introduction of S. 768 are located in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'') Mr. ROTH addressed the Chair.

Mr. GORTON. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GORTON

Mr. GORTON. That is a very good question, I say to the Senator from Alabama. It is my intention to have it the greater. I know this says the lesser. I will check and see and we will change it.

Mr. GORTON. I need to say to the Senator from Alabama, I believe I misspoke myself because there are two separate uses of the $250,000 figure.

Mr. GORTON. There are two separate uses of the figure $250,000 in this Gorton-Rockefeller second-degree amendment. The first is that in most cases, in normal cases, the $250,000--rather the Snowe amendment says that the maximum punitive damage award is twice the total of economic and noneconomic damages. This adds to that, or $250,000, whichever is greater. Let us say in a case the total economic and noneconomic damages were $15,000. Twice that is $30,000. Under this amendment, nonetheless, the jury could award $250,000 as being greater than $30,000. In the case of the small business, however, the business with fewer than 25 employees or the individual defendant with less than $500,000 in assets, $250,000 or twice economic and noneconomic damages, whichever is the lesser is the ceiling. Mrs. MURRAY addressed the Chair.

Mr. GORTON. The Shelby amendment is not included in it, I say to the Senator from Alabama. On consideration and on speaking to a wide number of other Members, we believe that the peculiar rules in Alabama with respect to wrongful death decisions, that we were going to do one of two things: Either create a hole in this bill big enough to drive a truck through or, alternatively, encourage the Alabama Legislature to change its law to conform with those of other States.

Mr. GORTON. I yield the floor.

Mr. GORTON. The single printed copy of the amendment that I had was submitted to the desk about 15 minutes ago, and it is in the process of being copied. I hope within the next 5 minutes we will have copies for every Member.

Mr. GORTON. Mr. President, I suggest the absence of a quorum.

Mr. GORTON. I will be delighted to do so.

Mr. GORTON. Mr. President, I address these remarks to the President, and through him to my distinguished colleague from Alabama, who is opposed to this bill, and I hope to all Senators or to their staffs, because I hope and trust that this will be the final amendment with which we will deal on this bill, as we are to vote cloture on the Coverdell substitute at 4 o'clock. But as the proponents of product liability hope that Coverdell will be amended as per this proposal by Senator Rockefeller and myself, I believe I should outline the key changes between the Coverdell proposal of last Friday and this one, because either before or after cloture it will be this amendment which becomes the final product liability vehicle for the Senate to vote on. We can discuss a bit later all of the details of the proposal. But as the Senate will remember, last week what had started out to be a product liability bill was very considerably expanded, first by an amendment by Senator Abraham from Michigan on relationships between lawyers and clients with respect to their fees and, second, by a proposal with respect to civil procedure 11 on frivolous lawsuits. But more significantly, there was added an entirely new set of provisions on medical malpractice--a new medical malpractice code--to override, in many respects, the codes of the States. And, secondly, a broadening amendment by the majority leader, Senator Dole, which extended the punitive damage rules contained in the product liability bill at that point to all civil litigation; and, of course, some change in the rules relating to punitive damages by the adoption of the Snowe amendment which limited punitive damages in product liability cases and then, by extension of the Dole amendment, to all [[Page S6248]] cases to an amount not to exceed twice the total of both noneconomic and economic damages. When on two occasions last Thursday cloture was rejected on that broadened legal reform proposal, Senator Coverdell, with the help of the majority leader, Senator Dole, put the Coverdell substitute on the desk on Friday and filed a cloture motion on it. It returned the bill pretty much to the status of a product liability bill, with one exception that I will speak to in a moment. It restored for all practical purposes the original Rockefeller-Gorton bill with the Snowe and DeWine changes to punitive damages. The Snowe amendment, as I have already said, said that punitive damages would be limited to an amount twice the amount of the total of all compensatory damages, economic, and noneconomic. The DeWine amendment limited the amount of punitive damages to $250,000 in the case of small businesses, those with fewer than 25 employees, and individual defendants of modest means with a net worth of less than $500,000. There was no Abraham amendment in the Coverdell substitute. There was no change in rule 11 in the Coverdell substitute. There were also no alternative dispute resolution provisions at all, as they had been stricken before the cloture vote by a Kyl amendment. However, the Coverdell substitute did extend the punitive damage rules related to small businesses only--that is to say, the DeWine amendment limiting punitive damages against small businesses or modest individuals to $250,000--to all litigation. It retained that part of the original Dole amendment. After extensive negotiations Friday and over the weekend with my partner in this, Senator Rockefeller, and his negotiations with as many as 15 members of the Democratic Party who want some product liability reform but who have been, to a greater or lesser extent, opposed to any theoretical limitations on the potential for punitive damages, we have arrived at this Rockefeller-Gorton second-degree amendment. How does this change the Coverdell proposal? Mr. President, it changes it in about four ways. First, we do return to a set of alternative dispute reasons or sections in the bill, but they are not the alternative dispute resolution provisions that were stricken by the Kyl amendment. Senator Kyl opposed those for two reasons: First, because they overrode the alternative dispute rules of the various States; and, second, because they provided sanctions against defendants but no comparable sanctions against plaintiffs when the proposed ADR solution was more favorable to the winning party. The new Rockefeller-Gorton proposal on alternative dispute resolutions simply set up a set of rules under which States will conduct their own alternative dispute resolution proceedings. We do not override State rules on ADR, alternative dispute resolutions, except with respect to the time with which they must be commenced. So the only places in which these rules would be more or less mandatory are in that tiny handful of States that have no ADR provisions whatsoever. The second and most important change in this bill relates to the formula for the maximum level of punitive damages. The long and short of it is, Mr. President, that there is no longer any theoretical maximum limit on punitive damages, which I think will secure the support of many Senators of both parties who have wanted some kind of reform in the product liability field but have not wanted even the limitations that were contained in the Snowe amendment. So let me describe what they are now. In cases that go before juries, the Snowe amendment will continue to be the case with the modifications proposed by Senator DeWine; that is to say, the jury will have an upward limit in its award of punitive damages of twice the total of both economic and noneconomic damages. Economic damages, Mr. President, are those for lost wages, for medical expenses and the like, the full out of pocket losses of the claimant. Noneconomic damages are those for pain and suffering which, almost by definition, are more subjective in nature. You will total up the sum of noneconomic and economic damages and punitive damages can be awarded or, of course, not awarded, but cannot be awarded by the jury in an amount greater than twice the total of those economic and noneconomic damages, except that if that total is less than $250,000, the jury can award up to $250,000. So the maximum jury award will be $250,000 or twice the total of all compensatory damages, whichever is higher. The big change, Mr. President, however, is the fact that the judge in the case may add to that award of punitive damages if the judge feels that it is inadequate because of the egregious nature of the tort which led to the punitive damages in the first place. The judge may add to that number and may do so in an unlimited fashion, there is no cap in this Rockefeller-Gorton amendment, except that if a judge does do so-- in other words, what we consider a requirement by the seventh amendment--the defendant would have the right to a new trial to go back and start all over again. There is one other major difference and that other major difference is a criticism which the Senator from Alabama made just a few moments ago against the Coverdell amendment; that is, there is no attempt in this bill to extend these punitive damage rules or limitations to cases other than product liability. In other words, that portion of the Dole amendment of last week which was left in the Coverdell substitute is now gone. This bill now applies to punitive damage cases only, as it did when it was reported by the Commerce Committee. The profound difference between the form in which it finds itself here and the way in which it was reported from the Commerce Committee with debate beginning 2 weeks ago today, if my memory serves me correctly, the profound difference is in respect to punitive damages. You will remember that the original bill from the Commerce Committee had a cap of $250,000 or three times economic damages only, whichever was higher. The Snowe amendment effectively lifted that cap, to a certain degree. This removes the cap entirely, but only when a judge determines that that limitation would be unreasonable and finds the actions of the defendant sufficiently egregious to warrant it. Excuse me, there is one other matter, the DeWine amendment, which does set a separate rule for small business defendants and for individual defendants whose assets do not exceed half a million dollars, designed to see a single case does not bankrupt. So, Mr. President, I recognize that this is, oh, if not a complicated set of changes, still a complicated bill because the Senator from West Virginia and this Senator have collaborated on drafting this amendment because it reflects, I believe--and he can speak to it himself when he gets to the floor--because it reflects the views of the more than a dozen additional members of the Democratic Party who have been working with Senator Rockefeller, and because it represents the considered views of the majority leader at this point. I hope that we will be permitted to adopt this second-degree amendment before 4 o'clock, so that it is absolutely clear exactly what the cloture vote is on. I can say, Mr. President, that if that does not happen, if we have not adopted the second-degree amendment by 4 o'clock, I can assure Members that this amendment will be adopted postcloture before we reach a vote on final passage on the bill. I speak in this case for myself, for Senator Rockefeller and for the majority leader; in other words, I believe that among us, we can guarantee enough votes so that Members can be assured that what they are bringing to a close is a debate on this modified proposal, a proposal which does not have the caps on punitive damages which caused, I think, the great bulk of the debate on this issue during the course of the last 2 weeks. I can say rather bluntly, Mr. President, that I do not regard this as a totally satisfactory response. I believe that the desire for predictability and for economic progress and opportunity in this country calls for limitations on punitive damages which this proposal lacks. [[Page S6249]] So I have given up ideas which I think are quite important in connection with this aspect of legal reform, but I have done so for the greater good for accomplishing something, for doing something to bring a greater degree of balance and fairness into this whole field than exists at the present time. I expect during the course of the next hour that my friend, the Senator from West Virginia, will be here. I believe that the majority leader will ratify what I have said. I see the Senator from Alabama on his feet, and I will let him either speak to it----

Mr. GORTON. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. GORTON. Mr. President, on my behalf and on behalf of the Senator from West Virginia [Mr. Rockefeller], I have just filed with the clerk a second-degree amendment, and I ask that that second-degree amendment be reported.

Mr. GORTON. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GORTON. No, it is the greater of.

Mr. GORTON. Excuse me, Mr. President, the Senator from Washington has the floor. Mr. President, can I have the attention of the Senator from Alabama?

Mr. GORTON

Mr. GORTON. Mr. President, I simply want to announce to the friends and supporters of this bill that this will not be a meaningful cloture vote. In the haste to draft the Gorton-Rockefeller amendment, a couple of drafting errors were made that can only be removed at this point by unanimous consent. Unanimous consent, as the body knows, was not granted. Second, because the Gorton-Rockefeller amendment is in the nature of a substitute, had cloture been granted and had the Gorton-Rockefeller amendment been adopted, which it would have been, it would have cut off all other postcloture amendments from the opponents to the bill and that, too, could only have been waived by unanimous consent. So I say to Members who have worked on this compromise, they can vote for or against cloture at will. I do not expect cloture to be invoked. I cannot under these circumstances vote for cloture myself. The bill by tomorrow morning will be in proper form, both for its own passage and to allow postcloture amendments. Tomorrow morning's cloture vote will be the significant one on this bill and not the vote that is being taken this evening. Mr. President, I suggest the absence of a quorum.

Mr. GORTON. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GORTON

Mr. GORTON. Mr. President, I said just before this vote, for technical reasons, given the nature of the amendment, with our 3 o'clock deadline and the haste to file the Rockefeller-Gorton substitute, certain drafting errors were made which could not be cured without unanimous consent. Unanimous consent was not granted. Therefore, Senator Rockefeller and I both voted no on cloture this time around and regard this last vote as essentially meaningless. Between now and the adjournment of the Senate today, we will introduce a revised second-degree amendment with the majority leader that will reflect our precise views and the agreement that has been made with the consent of, I think, a very substantial majority of the Members, as to the final form of this bill. Tomorrow we will vote on cloture once again. If we have not been allowed by unanimous consent to adopt that second-degree amendment, the sponsors are confident in making a guarantee it will pass immediately after cloture is invoked. Mr. President, inquiry: Do we have an order to go on to another subject at this point?

Mr. GORTON

Mr. GORTON. I yield the floor. Mr. ROCKEFELLER addressed the Chair.

Mr. GORTON. Mr. President, I send a modification of my earlier amendment to the desk on behalf of myself, Senator Rockefeller, and Senator Dole.

Mr. GORTON

Mr. GORTON. Mr. President, I move to reconsider the vote.

Mr. GORTON

Mr. GORTON. I am sorry; I was distracted.